Many American colleges and universities have already closed due to rising costs, flagging enrollment, and mismanagement. Students have been left out in a lurch, not knowing whether they would be able to transfer their credits or earn their degree.

Now, colleges are bracing for a financial crisis of unprecedented proportions. 

A triple threat —expiring pandemic-era funding, a botched federal financial aid roll-out, and a rapidly evolving job market—threatens the entire higher ed landscape. How schools react will define whether or not they survive.

The Funding Cliff

The inevitable expiration of federal pandemic relief funds, aka the "funding cliff," poses a significant threat to the budgets of all colleges. Many colleges relied heavily on these funds to keep their doors open during and after the COVID-19 crisis. With these funds going away, institutions are making difficult decisions about budget cuts, affecting staffing, programs, and student services, or completely shuttering.

FAFSA Fiasco

Compounding the financial strain is the disastrous rollout of the new Free Application for Federal Student Aid (FAFSA). The Department of Education's rollout of the “simplified” form has been plagued by delays, glitches, and errors, leaving tens of thousands of students, their families, and institutions in limbo. This directly led to low FAFSA completion rates, reducing enrollment and further straining college budgets.

AI, the Runaway Train

As if that wasn’t enough, colleges must also grapple with the short and long-term implications of artificial intelligence and automation on the job market. The rapid advancement of these technologies is reshaping workforce needs, questioning the value proposition of traditional higher education, including whether or not they are even equipped to teach how to use AI properly.

We know that all rules-based jobs that colleges traditionally prepared students for will be automated, significantly altered, or replaced by AI, forcing colleges to reevaluate their curricula and career preparation strategies.

This disconnect between the skills taught in college and those required in the AI-driven job market will only grow. More students than ever have already decided that they would have better job prospects going to hands-on jobs such as nursing, lab technicians, or the trades, like plumbing, HVAC, electrical.

Colleges that do not adapt quickly to remain relevant and attractive to prospective students will go out of business.

4 things colleges can do today to improve their product:

• Create co-ops with local companies to give students real working experience are so popular, which is one reason why Northeastern University is one of the hottest schools in the US.
• Providing the opportunity or even requiring a semester or year abroad to get global exposure is in high demand for prospective students.
• Developing programs that prepare students for the AI-driven job market will be crucial for maintaining relevance and attracting students.
• Investing in AI and automation themselves can help colleges streamline operations and reduce costs.

Will your school survive? How strong is their ability to continue?

Check on your school's financial health here:

https://www.bain.com/insights/how-financially-stable-is-your-college-interactive/

Forbes grades private colleges' financial health:

https://www.forbes.com/sites/emmawhitford/2023/04/26/forbes-2023-college-financial-grades-the-strongest-and-weakest-colleges/

This is THE tipping point for higher education.

As higher education navigates these turbulent waters, the sector's resilience and adaptability will be put to the test. Students (actually, they are clients) are smarter than ever, more demanding than ever. The institutions that survive—and thrive—will be those that can rapidly evolve to meet the changing needs of students and the workforce in an increasingly automated world.

At FutureProof You, we believe that the educational system does not teach the practical knowledge people need to manage their career. We provide career management courses and coaching for people at all stages in their life around job hunting, personal branding, LinkedIn and resume writing, networking, interview preparation, and learning AI skills. With live and asynchronous opportunities to learn, you are in control over your future. Follow us and enroll today.

Dan's LinkTree has his social media links, as well as his contact info & other popular articles he has written. If you have questions on career change, higher education, or job hunting, reach out to him!